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Managing a Poor Man’s Covered Call Trade When Share Price Drops Below the LEAPS Strike

A typical Poor Man’s Covered Call (PMCC) trade involves buying a deep in-the-money call LEAPS option and selling short-term out-of-the-money call options which is protected by the long LEAPS position. In April 2020, Martin shared with me a PMCC trade he executed with PPL Corp. (NYSE: PPL) where share price declined below the LEAPS strike […]

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How to set up a covered call writing portfolio using stock selection, option & position management

Watch Video: Listen To Audio Version: The Blue Collar Investor webinar Oct 15th: How to set up a covered call writing portfolio using stock selection, option & position management BECOME A BCI MEMBER TODAY: PREMIUM MEMBERSHIP SEE BCI COURSE & PRODUCTS : BCI STORE  — STOCKS,TRADING,STOCK MARKET,COVERED CALLS,covered call writing,Axsome,Therapeutics,Ellman Calculator,gap-up,cost-to-close,implied volatility,Alpha,Beta,seeking,alpha,cost-basis,time-value,intrinsic- value,put-selling,collar calculator,put calculator,stock […]

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Ask Alan

Ask Alan #175 – What is My Cost Basis?

Alan answers a question posed by Andy, who asks: In Ask Alan video #3, BWLD was bought at $82.40 and the $80.00 call was sold for $4.40. Five days before expiration, BWLD was at $84.50 and the cost to buy back the option was $4.80. What should I use as the cost-basis if I did […]

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Anatomy of a Reverse Stock Split

Option contracts can be standard or adjusted. Certain corporate events may change standard option contracts to adjusted contracts. These events include stock splits, mergers, acquisitions, special dividends, spin-offs and reverse splits. After these events, options are altered to reflect these changes and make buyers and sellers of options whole. This article will focus in on […]

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Rolling Out-And-Up: 6-Week Returns

Option calculations help guide us to an accurate assessment of our covered call writing profits. It’s more meaningful to use percentages rather than dollar amounts when executing these calculations. For example, a $1000.00 profit on a $10,000.00 investment (10%) is much more significant than a $1000.00 return on a $100,000.00 investment (1%). That’s why percentages […]

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BCI PODCAST 26. Selling Cash Secured Puts to Lower Cost Basis

Watch Video: Listen To Audio Version: Selling out-of-the-money (OTM) cash-secured puts creates an opportunity to “buy a stock at a discount” if the put option is exercised. If unexercised, we generate a monthly cash flow via the option premium. When one of our stocks declines in value, we can lower our cost-basis by selling OTM […]

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BCI PODCAST 25. “Hitting a Double” with Procter & Gamble Covered Call Writing Exit Strategies

Watch Video: Listen To Audio Version: Managing our covered call writing trades is essential to achieving the highest possible returns. In this podcast the “hitting a double” exit strategy will be highlighted with a real-life example with Procter & Gamble. After selling the initial short call, it is bought back when share price declines and […]

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BCI PODCAST 24. Using Covered Call Writing and Stock Dividends in Low Interest Rate Environments

Watch Video: Listen To Audio Version: Details a strategy with a potential of 3 income streams for each trade: one from share appreciation, another from stock dividend distribution and a third from option premium. Stock selection will come from the Dow 30, option selection will focus on out-of-the-money strikes and position management will focus in […]

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BCI PODCAST 23. Covered Call Writing with Weekly Options Portfolio Overwriting with Weeklys

Watch Video: Listen To Audio Version: Covered call writing can elevate returns for long-term buy-and-hold portfolios trading in non-sheltered accounts. The use of Weekly options can be especially beneficial in these circumstances. This podcast also introduces the BCI Portfolio Overwriting Calculator. BECOME A BCI MEMBER TODAY: PREMIUM MEMBERSHIP SEE BCI COURSE & PRODUCTS : BCI […]

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BCI PODCAST 22. A Covered Call Writing Alternative to Rolling Up in the Same Contract Month

Watch Video: Listen To Audio Version: The mid-contract unwind exit strategy closes an entire covered call trade when the strike moves deep in-the-money and enters a new trade with a new stock in the same contract month.. The key to success includes evaluating the time-value cost-to-close, not the entire premium cost-to-close. BECOME A BCI MEMBER […]

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